facture their products intended for foreign markets at a lower cost than they could supply similar products to home consumers. Pig iron, iron ore, spiegeleisen, and ferromanganese enter into the composition of steel rails, for instance, and when imported are dutiable, but 99 per cent of the duty paid on any of these products is remitted when they are used in the manufacture of rails for export. So with the pig iron that is imported to be manufactured into cast-iron pipe, and which is dutiable at $4 per gross ton. The remission of $3.96 of the duty on a ton of imported pig iron may enable our cast-iron pipe manufacturers to buy cheap foreign pig iron and to sell their pipe in foreign markets. The London Engineering for January 17, 1902, said of this drawback system: "A certain amount of trade is brought into the country that would otherwise be missed and no one loses anything."

Finally it may be said that nearly all the money that is paid by foreigners for American steel rails or for other steel products of American manufacture, no matter at what prices they may be sold, and irrespective of the sources of supply of raw materials, is paid to American labor that is engaged in their manufacture and that fully the half of this money finds its way into the pockets of American farmers. Both the workingman and the farmer should be thankful that our protective tariff policy, through its cheapening influence on the cost of production, by guaranteeing to capital the possession of the home markets and stimulating competition has enabled our manufacturers to sell a part of their products in foreign markets, even if they sometimes sell at a loss. If manufacturers lose, that is their misfortune; the workingmen receive their wages all the same and the farmers get their full share of these wages.

Other countries recognize the economic necessity of keeping their manufacturing establishments fully employed, and habitually_sell their surplus products in foreign markets at cut prices. Great Britain and Germany are conspicuous examples of the truth of this statement. American free traders do not complain of the methods adopted by other countries to sell their surplus products, made by cheap labor, in our markets. Their criticism is reserved for the manufacturers of our own country who employ American labor and pay it good wages.

An English writer in Cassier's Magazine for July, 1908, complaining of German competition in English steel markets, says: "The chief factor in the promotion of Germany's foreign trade these last ten years has been the policy of granting cooperative bounties on steel goods for export."

PRICES OF STEEL RAILS IN FREE-TRADE ENGLAND.

The following table, for which we are indebted to Mr. J. S. Jeans, late secretary of the British Iron Trade Association, gives the average annual prices of steel rails at Middlesborough, England, per gross ton, from 1895 to 1905, in American currency, with which we compare the average prices of steel rails in the United States for the same years. We have ourselves reduced the English prices to American equivalents:

61318-SCHED C- -09- -37

The prices of steel rails in England in 1906 and 1907 are given in the following extract from a letter we have received from a trustworthy English correspondent: "I have made inquiries with reference to the prices of steel rails in 1906 and in 1907. In 1906 they ranged from £5 10s. ($26.76) to £6 ($29.20). Early in 1907 they went up to about £7 ($34.06) until about the middle of the year, and then they gradually declined to £6 5s. ($30.41) in November and December. These prices were given me by a London firm, but they tell me that the prices were the same in Middlesborough, as the prices are controlled by the British Rail Syndicate."

Below will be found a table giving the average monthly prices of British and American Bessemer steel rails from January 1, 1906, to August 31, 1908. The British prices, which we have reduced to American equivalents, are for rails free on board at Middlesborough, and the American prices are for rails at mills in Pennsylvania. The British prices are compiled from quotations in the Iron and Coal Trades Review, the leading iron-trade paper published in the United Kingdom. In 1906 and 1907 the maximum price for British steel rails was reached in August, 1907, the price during the whole month ranging $5.45 per ton above the American price. The average yearly price for English steel rails in 1906 was $30.73 per ton; in 1907 it was $32.59, and in the eight months of 1908 it was $28.97. The uniform price of American steel rails from 1902 to 1908 has been $28.

The above prices for 1906 and 1907 do not exactly correspond with others which have been given to us by our English correspondent, but they do agree in giving English prices in these two years at much higher figures than the uniform price that prevailed in our own country. If American railroad companies had been compelled to purchase British rails during the period covered by the above table at the prices prevailing in England the additional cost to them would have been at least $27,000,000.

We reproduce the above tables and the supplementary statements because they are a complete answer to those free traders of all political parties who are constantly alleging that American railroad companies are charged extortionate prices for steel rails as a result of the protective duty on rails. The duty on steel rails is $7.84 per ton. Where in the figures we have given can the free trader find this duty or any part of it added to the English price?

It may be asked, If steel rails are made in this country and sold at lower prices than in free-trade England, why is any duty on steel rails needed? Because England does not make all the rails that might be sold in our markets; Germany and Belgium are large producers; and because duties on foreign products should be placed high enough to prevent them from being unloaded upon our markets in periods of great depression abroad and great industrial activity at home, when foreign prices fall so low that we could not possibly compete with them. A protective duty on steel rails is also needed to protect our steel-rail makers, and the producers of the raw materials which enter into their manufacture, from the competition which is made possible by continental syndicates and export bounties.

NO MONOPOLY IN THE IRON TRADE.

To refute a common free-trade charge, we republish from our annual report for 1907 the following table, which gives the percentages of production of all leading iron and steel products by the United States Steel Corporation and by independent companies in the year 1907. It also gives for the same year the percentages of shipments of iron ore by the corporation and also by the independent companies from the Lake Superior region, and the percentages of the total production of iron ore and also of coke in the whole country

by the corporation and by the independent companies. The statistics of the total shipments of iron ore from the Lake Superior region and of the production of iron and steel we obtain from the Annual Report of the American Iron and Steel Association for 1907, and the statistics of the country's total production of iron ore and coke we have obtained from the publications of the division of mining and mineral resources of the United States Geological Survey, the corporation reporting to us its share of these shipments and production.

Statement of the products of the United States Steel Corporation and of indcpendent companies in 1907 by percentages.

This table completely disproves the statement so often made that the United States Steel Corporation is a monopoly which controls the iron and steel industries of the country, and that it stifles all competition in these lines of industrial development. Indeed, there is one branch of the steel industry in which it is not engaged at all-themanufacture of crucible steel.

JAMES M. SWANK,

General Manager American Iron and Steel Association.

IRON AND STEEL PRODUCTS.

CHARLES EUGENE CLARK, COVINGTON, KY., ASKS NECESSARY PROTECTION FOR THE SMALLER PRODUCER.

COMMITTEE ON WAYS AND MEANS,

CHICAGO, December 18, 1908.

Washington, D. C.

DEAR SIRS: Having been formerly engaged in the iron-foundry business in Covington, Ky., where I now reside, I desire to state such

facts as have come to my knowledge from my connection with the iron industry.

In my brief experience I always found that the small manufacturer and producer paid more for labor and got smaller results from his business and its investment than the larger producer.

The percentage and average cost of production of an article of the iron and steel industries is smaller to the large operator than to the small operator, who is always at a disadvantage.

The average ironworker," employee," always feels that he should receive a larger price per ton for his work than an employee doing similar work in a plant of greater capacity, because the output, or tonnage, in the large mill far exceeds in a given number of hours, or heats, that of a smaller plant.

The larger plants are always equipped with the latest machinery, are most ably managed, and larger and better results accrue to both employer and employee in same than will accrue to the owner and employee of the smaller mill, or manufactory, because it is absolutely physically impossible for the smaller mill to produce the weight of metal in the same given hours as the larger mill. Consequently the ironworker is dissatisfied in the smaller plant, wants a better scale, and the better or more skillful workmen naturally drift to the big mills, where they can produce the bigger tonnage in a given time and secure a greater recompense for their labor.

So you see that the smaller producer always labors under a great disadvantage.

If protection is of advantage to the iron and steel industry, then surely the small producer stands in sore need of it. The larger producers, such as the United States Steel Company, The Republic Iron and Steel Company, and the Sloss-Sheffield Company, with their immense plants, great coal and iron fields, could produce steel and iron under a modified tariff profitably, perhaps, when the smaller producer would under the same reduction be compelled to run at an inadequate profit, or driven to bankruptcy.

In my humble judgment, it is necessary to adequately protect the iron and steel industries in order that the smaller producers shall not be driven out of business and wiped off of the map.

He who bores with a big auger produces large results, while he who bores with a smaller one produces less results, but all are necessary factors in fulfilling the wants of the nation and adding to its wealth and prosperity.

Very sincerely, yours,

CHAS. EUGENE CLARK.

HON. W. BOURKE COCKRAN, M. C., FILES LETTER OF J. E. YOUNG, OF CHICAGO, ILL., RELATIVE TO PRICES OF RAILS.

Hon. BOURKE COCKRAN, M. C.

71 PARK AVENUE, Chicago, December 25, 1908.

DEAR SIR: In the report of the examination of Mr. Carnegie before your tariff committee, as made by yourself, it appeared to me that your aim was to get at the real merits of the case and not to bolster up any particular theory. There is one item having a bearing